As most Peninsula residents know, two public agencies and a private company, California American Water, have proposed what they call the Regional Water Project, using desalination to help resolve at least one of our local water problems.

The proposal is directed not to Cal Am ratepayers or to the public for a vote but to the California Public Utilities Commission (PUC), which regulates private utilities. Cal Am wants the commission to approve an organizational agreement among the three agencies and an agreement governing its purchase of desalinated water from one of the public agencies, the Marina Coast Water District, which is the proposed builder and owner of the desalination plant.

Although Marina Coast will own the plant and Monterey County will build and own the wells, Cal Am ratepayers are expected to pay for it all.

Our water problems are twofold: supply and cost. The Regional Water Project ameliorates the first and exacerbates the cost issue.

Two questions capture the essence of the cost problem. First, when normally produced water on average costs $200 an acre-foot in the United States (according to the U.S. Geological Survey), why are we on the Peninsula now, without desal, already paying 10 times that amount? And, second, why is the desalinated water expected to cost at least 20 times that normal amount?

One compelling answer is that, different from more than 85 percent of water users in our nation, we get our water from a private company rather than a public entity. Without competition, private utility companies need government regulation if they are not to enrich their owners at the expense of their customers. Too often, however, government regulators are captives of the industries they regulate. In view of our 10-times-normal water bills, that is evidently the relationship between Cal Am and the PUC.

To appreciate the regulatory dysfunction behind our local water woes, we need to understand three things:

· Cal Am shareholders annually are allowed to receive 9.9 percent of the company”s current value, not its operating expenses, as some people mistakenly believe.

· Monterey County requires public ownership of water sources such as desalination plants.

· The Monterey Peninsula Water Management District requires public approval of any water-source project it might propose, like a dam or desalination.

The Regional Water Project estimates that the 8,800 acre-feet of desalinated water it will deliver to Cal Am ratepayers per year will cost $4,000 an acre-foot. Other agencies involved in the issue have even higher estimates. The Division of Ratepayer Advocates of the PUC estimates the cost at $3,200 to $5,600 per acre-foot, plus $1,500 for conveyance. Estimated costs of the plant itself range from $250 million (Cal Am) to $500 million (Division of Ratepayer Advocates).

To resolve these differences, an administrative law judge “adjudicating” the issue called a meeting of the disputing parties in May. The consensus value for the total cost per acre-foot was on the order of $5,700 per acre-foot for Peninsula water users, according the Citizens for Public Water, which took part in the meeting.

This contrasts sharply with the estimated cost of desalinated water to be provided to Marina Coast ratepayers—$148 per acre-foot. That alone cries out for some sort of cost control on the bay side of Monterey County.

According to the Wall Street Journal (January 2008), 13,080 desalination plants are in operation worldwide. In Israel, the cost of desal is $654 per acre-foot. In Singapore, it is even less, $604. Even though the California Coastal Commission cited a range of $1,560 to $3,432 in 2010 dollars, the U.S. Geological Survey said in March that the cost of desal in Tampa Bay was $650. Poseidon Resources reportedly has indicated that the customers of its Carlsbad desal plant will pay only $950 per acre-foot.

Meanwhile, the price of desalination has declined by half in the past decade, according to the 2008 Wall Street Journal article.

So why the consensus cost estimate here, a sky-high $5,700 per acre-foot? Who locally is responsible for giving local water ratepayers an objective and honest answer to that question?

Cal Am is the face of water on the Peninsula, and our first impulse is to look to it for help. We should know better. Cal Am has everything to gain and nothing to lose from the Regional Water Project. For instance, we Peninsula ratepayers will pay for the $13 million pipeline from Marina to Cal Am territory, but Cal Am will own it. After it is paid for, Cal Am shareholders will get 9.9 percent of its value, a cool $1,287,000 annually, from us.

To have control over what we pay and to own what we pay for, Peninsula water users can vote to replace Cal Am with a publicly owned water utility like Marina Coast. Particularly if the PUC turns down the Regional Water Project, that is precisely what we will have to do to avoid draconian cuts in our water supply. In that event, the PUC will be out of the picture, as will Marina Coast, and we will be in charge of our own water destiny.

A safe bet if that happens is that the cost of desalinated water on the Peninsula will be in the neighborhood of the “new normal” cost elsewhere in the world, perhaps even lower than the $2,000 per acre-foot we pay now for fresh water from the Carmel River and the Seaside aquifer.

Alternatively, the Monterey Peninsula Water Management District could take charge. Many of us blame the district for perennial inaction when we should blame ourselves. We not only elect the district”s board, but we also vote up or down the water projects the district proposes.

We have voted down both a dam and a desal project proposed by the district more than a decade ago. What has changed since is that the State Water Resources Control Board is threatening to complete a cease-and-desist order seriously reducing our draw from the river. We go desal, or we go without water.

Will the district realize that today is different from yesterday and step up to the challenge? Probably not. That”s because it can point to the voters, who can point to a consortium of Peninsula cities. The result may be inaction by everybody on the Peninsula, with the water users paying dearly for the inaction.

Ron Weitzman, who lives in Carmel, is a longtime advocate of private ownership of the local water system. He has written frequently on water-related topics.

Correction: A column on Saturday”s Opinion page should have identified the author, Ron Weitzman, as an advocate of public ownership of the local water system.